The new court order, banning sale of BSIII vehicles in the country, which came into effect in April 2017, resulted in a hefty inventory of unsold stocks. One of the largest vehicle manufacturer in the country, Tata Motors reveals that they have over 18,000 units of vehicles – 15,000 in their stockyard, and remaining 3,000 with their dealers, reveals Reuters.
Though it is going to be a difficult move forward, in order to sell this unsold stock, Tata Motors plans on export of some of these stocks over the next 4-6 months with the balance stocks to be converted to BS IV technology.
Even as the new order came into effect from 1st April 2017, it has been proposed since 2015 citing the urgent need to bring in less polluting vehicles. However, automakers argue that the order did not propose banning sale of older technology vehicles in the country on the same date. This has led to huge financial losses for companies leaving them with unsold stocks.
According to research firm Crisil, the ban on sale of BS III vehicles has resulted to losses worth INR 2,500 crores for commercial vehicle manufacturers in the country while two wheeler makes have also suffered manifold losses. Manufacturers were of the opinion that the govt would allow them to sell the unsold stock, as was the case during previous transitions (BS2 to BS3). But this time, govt had different plans. They stated that from 1st April no BS3 vehicle will be allowed to be sold in the country.
Some automakers such as Toyota and Bajaj stalled production of BS III vehicles well ahead of the ban and hence do not suffer from accumulated stocks. However, others understood that the ban was only on manufacture of BS III vehicles and not on sales and hence have to face such a dilemma. The Supreme Court has gone ahead with the ban stating that details of the ban were very clear from the start and that public health took precedence over piling stocks.
